G.R. No. L-4012; June 30, 1952
Municipality of Batangas, plaintiff-cross-defendant-appellee, vs. Albino N. Cantos, Julia B. Cantos, Anacleto Berana and Hilaria Gamboa, defendants-appellants. Albino N. Cantos, and Julia B. Cantos, cross-plaintiffs. Jose Caedo, et als., cross-defendants-appellees.

FACTS

The Municipality of Batangas filed an action for specific performance against spouses Albino N. Cantos and Julia B. Cantos (principals) and Anacleto Berana and Hilaria Gamboa (sureties). The complaint sought to compel them to remove the “Cine Batangas” building from a public school site owned by the municipality and to recover P2,000 as liquidated damages. The municipality owned the land, acquired around 1908-1909 for school purposes. A school building thereon was burned in 1941. In 1943, the municipal council approved Resolution No. 20, accepting the Cantos spouses’ offer to lease a portion (800 sq. m.) for five years to erect a cinema, subject to the condition that the municipality could cancel the contract “at any time the government finds a need for the said site,” requiring the lessee to vacate and remove the building at their expense. A contract of lease (Exhibit “1”) was executed on July 1, 1943, embodying these terms. The spouses constructed a theater building. On October 27, 1945, a subsequent agreement (Exhibit “B”) was entered into, wherein the spouses agreed to vacate by April 1, 1946, and definitely remove the building by April 15, 1946, at their expense, supported by a bond from the principals and sureties for compliance and payment of P2,000 liquidated damages if court action ensued. The spouses failed to remove the building. After a demand on August 10, 1946, was unheeded, the municipality filed the suit. The defendants answered, setting up special defenses and a counterclaim, including a cross-claim against former and incumbent municipal officials (Jose Caedo, et al.), seeking punitive and actual damages. They later filed a motion to dismiss, alleging the action was for unlawful detainer and within the exclusive jurisdiction of the justice of the peace court. The trial court denied the motion, holding it was an action for specific performance. After trial, the court rendered judgment in favor of the municipality. The defendants appealed to the Court of Appeals, which certified the case to the Supreme Court due to a jurisdictional issue.

ISSUE

1. Whether the action is one for unlawful detainer (within the exclusive jurisdiction of the justice of the peace court) or for specific performance (within the jurisdiction of the Court of First Instance).
2. Whether Resolution No. 24 of the municipal council (declaring the original lease contract null and void) and the subsequent agreement (Exhibit “B”) are valid and binding.
3. Whether the municipality had the right to terminate the lease and demand removal of the building.

RULING

1. The action is one for specific performance, not unlawful detainer. The complaint’s purpose was to exact specific performance of the contract (Exhibit “B”) whereby the spouses agreed to vacate and remove the building. There was no allegation that defendants were still in possession necessitating ejection; rather, the prayer sought an injunction to compel removal. The defendants’ answer and counterclaim, which focused on disputing the contract’s validity and seeking damages from municipal officials, indicated their understanding that the action was for specific performance. The lower court correctly denied the motion to dismiss.
2. The contract Exhibit “B” is valid and binding. The defendants’ contention that it was executed through force, deceit, or intimidation was not supported by evidence. The evidence showed it was voluntarily entered into as a concession by the municipality to give the spouses time to remove the building. Regardless, even under the original lease contract (Exhibit “1”), the municipality had the right to rescind “at any time that the municipality of Batangas would need the aforementioned site leased for any important purpose.” The municipality’s need for the site for school purposes after liberation constituted such an important purpose.
3. The municipality had the right to terminate the lease and demand removal. The property was dedicated to public use (school purposes). The mere attempt to sell the property earlier to acquire a more suitable site did not convert it into patrimonial or private property; it remained a public property. The municipality’s demand for the site to resume school activities was a valid and important purpose under the contract. The decision of the lower court was affirmed.